Two years after acquiring Midshire, Sharp Business Systems UK (SBSUK) has further strengthened its position in the IT market with the acquisition of Complete I.T., a provider of IT support services and cloud solutions, operating across the South of England. James Goulding spoke to SBSUK Managing Director Stuart Sykes to find out more about the rationale for the acquisition
I last crossed paths Stuart Sykes, Managing Director of Sharp Business Systems UK (SBSUK), at a Sharp dealer event in Edinburgh at the start of 2018. SBSUK had not long been part of the broader Foxconn Group and was in the process of diversifying its product portfolio and absorbing Midshire, an almost £30 million copier dealer it had acquired four or five months previously.
“At the time, Foxconn and Sharp in Japan had started to formulate an idea of Sharp in the future,” remembered Sykes. “They used the term ‘the smart office, which involved taking our traditional products (print, software solutions, control, workflow etc.) and visual solutions and starting to broaden how we can help our customers be more efficient in terms of how they communicate and collaborate. Over the last year and a bit, we have been constantly broadening our portfolio of products to be able to offer our customers and our dealer customers more added value, more products and services that will fit their changing needs.”
As part of this process, Sharp has been encouraging dealers to expand the range of Sharp products and solutions they carry, with particular emphasis on AV products. Sykes says it has done this by concentrating on two key areas.
“Number one, our industry is built on annuity; the click is everything to our dealers. They are looking for products that aren’t just a nice sell as a one-off but can generate some level of future revenue. We have worked hard with our dealers and our direct business to enable us to sell services around products that bring in that aftersales service revenue,” he said.
“Number two has been broadening the range of products in our AV portfolio. Going back two years, we had flat panels and interactive touch displays; we have now added lots of other things like a learning table that can be sold into places like nurseries and a ‘meet and greet table’ that goes up and down enables people to interact with specialist software, which could be used in secondary schools or in care homes to enable residents to keep in touch with relatives. These types of product are taking our visual solutions and making them more practical for customer applications.”
Other product launches include a new visitor management system (see page 5), the Skywell drinking fountain and, imminently, a Windows Collaboration Display. At some point, Sykes expects to make more of Sharp’s acquisition of the Toshiba computer business by encouraging dealers to offer dynabook-branded notebook computers on a device-as-a-service basis.
Sykes points out that product diversification has already had a noticeable impact on the make-up of SBSUK revenue. “Five years ago, revenue was 95% printrelated. Now, 16% of turnover is non-printrelated, and the acquisition of Complete I.T. will add to that,” he said.
Another effect of the Complete I.T. and Midshire acquisitions has been to increase the proportion of revenue from direct sales vs. indirect sales, from circa 50:50 to 60:40 – although Sykes is quick to point out that this does not mean SBSUK aims to become more of a direct business.
“It’s about growing both in parallel, rather than one instead of the other. Sharp has about 10% market share, so there is a lot of market to go after. We want our dealers to do more with Sharp and to grow the indirect side of the business both with MFPs and with the new products,” he said.
Sykes adds that the acquisition of Complete I.T. is not just about strengthening Sharp’s direct offering, but also has benefits for the Sharp’s MFP and AV resellers.
“We have already sat down with a number of our forward-thinking dealers to say ‘This is Complete I.T., part of Sharp. Here are its products and services. How can we package these up for you?’. We will start to design packages that really work for dealers. In many cases, this will vary from dealer to dealer,” he said.
Nor does Sykes rule out other acquisitions in the future.
“We remain acquisitive for the right businesses. We are not ruling out MFP acquisitions – offensive or defensive – and once we have done some hard yards and made sure the acquisition of Complete I.T. is a success, we will keep looking for different businesses or technologies or services to supplement that,” he said.
“Underpinning this is the convergence of technology and the fact that the skills you need to be able to sell in the new marketplace are going up in a really steep curve. We are about to launch the Windows Collaboration Display from Microsoft, which is a fantastic use of a visual solution with Windows backing and integration into things like Azure. You need the right skills to do that. Having Microsoft 365 capability, Azure capability is an absolute must. Being able to back up new products developed by Sharp and Foxconn locally with the skills needed to make a success of them is where our strategy comes together.”
Sykes added: “In the UK, we say ‘our mission is to help our customers create their own workplace of the future’ – whether a traditional workplace with bricks and mortar or a workplace without windows and walls. We want to sit down with customers and dealer customers and help them design the workplace of the future. That’s hard to do without the sophistication of an IT business in the background.”